In its closing financial statements for its first year in business, ABC Enterpri
ID: 2776917 • Letter: I
Question
In its closing financial statements for its first year in business, ABC Enterprises, had cash of $242, accounts receivable of $850, inventory of $820, net fixed assets of $3,408, accounts payable of $700, short-term notes payable of $740, long-term liabilities of $1,100, common stock of $1,160, retained earnings of $1,620, net sales of $2,768, cost of goods sold of $1,210, depreciation of $360, interest expense of $160, taxes of $312, addition to retained earnings of $508, and dividends paid of $218.
Using the information provided to create the company's income statement and balance sheet.
Explanation / Answer
Income statement Sales 2768 -COGS 1210 =gross profit 1558 -depreciation 360 =EBIT 1198 -Interest expense 160 =Profit before taxes 1038 -taxes 312 =Net income 726 -dividends 218 =addition to retained earnings 508 Balance sheet Assets Cash 242 Accounts receivables 850 Inventory 820 Current asset = 1912 Net fixed asset 3408 Total assets 5320 Liabilities accounts payable 700 short-term notes payable 740 Current liabilities 1440 long-term liabilities 1100 Total liabilities 2540 Shareholder equity Common stock 1160 retained earnings 1620 Shareholder equity= 2780 Total liabilities & shareholder equity= 5320